Wednesday, June 30, 2010

Are You Guys New Here?

Conference reconvened due to the protests from centrists Republicans in the Senate who didn't like the idea of taxing the big banks and hedge funds. Instead, taxpayers will pay for the regulation, since any TARP money unspent was supposed to go towards paying down the deficit. Those billions of dollars that would have been wiped out of the deficit will now have to come from the American people. Any money from higher bank assessments will ultimately cost consumers too, since banks will just pass on the expense to them through higher fees.

These Republicans have made a very strange choice. They decided to lighten the load on big banks, some of which will now just have to pay slightly higher assessments. Meanwhile, investment banks -- like Goldman Sachs -- will virtually escape the expense entirely, since they have few deposits. Hedge funds avoid the cost completely. Even though a tax on big banks might have been an economically questionable decision, it's hard to see how pushing the tax to average Americans and smaller banks helps matters.

If these Republicans were really concerned about a tax, then they should have demanded spending cuts to fill the gap or scaled back some of the expensive regulation that the bill calls for. The only ones who benefit from this change are big banks and hedge funds. Taxpayers and community banks are indisputably worse off.

What the hell is so strange about this? This is EXACTLY what any sentient observer of American politics would have expected them to do. Massive giveaways to big business, especially in financial services, is the bread and butter of the Republican party. And as we saw during the Bush years Republicans are not the least bit concerned about pushing those costs onto the taxpayers.

I don't know Indivglio at all but Ezra is way too smart to find anything about GOP behavior here to be strange or weird. It's par for the course.

As an added bonus Republicans will now run against the ObamaPelosiReid bill precisely because it shifts costs to taxpayers and small community banks. Democrats and liberal pundits will spend the entire fall trying to explain conference committees and that it was really a Republican idea - always a winning argument.

So Republicans get their policy objectives and shift the political costs to the Democrats - and Congressional Democrats agree to it all!

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